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IRIS. Look forward
EarnieTM
Holiday Pay Module Guide
April 2020
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IRIS. Look forward
Contents
Introduction .................................................................................................................................... 3
Steps to setting up the IRIS Holiday Pay module ........................................................................ 3
Turn on the IRIS Holiday Pay module ........................................................................................... 4
Configure Default Allowances ...................................................................................................... 4
Default Allowance tab............................................................................................................................. 4
Holiday Pay ........................................................................................................................................................... 4
Establish the 52 weeks to use for Average Weekly Earnings ..................................................... 5
Holiday Calculation tab .......................................................................................................................... 5
Define the pay elements to be included in Average Weekly Earnings............................................. 6
Configure Average Weekly Earnings .................................................................................................................. 6
Configure the Holidays of individual employees ........................................................................ 7
Employee Details ..................................................................................................................................... 7
Holiday Pay ........................................................................................................................................................... 7
Working Hours ..................................................................................................................................................... 7
Use Global Changes to update Default Allowances .................................................................... 9
Other fields you may wish to change using Global Changes: ...................................................................... 10
Use Import to update Default Allowances ................................................................................ 10
Pay Holidays during Payroll Run ................................................................................................ 11
Entering Holidays via the Absence Diary ................................................................................... 13
Reports .......................................................................................................................................... 13
Period Holiday Summary ..................................................................................................................... 13
Employee Absence Listing ................................................................................................................... 13
Employee Holiday Entitlement Report ............................................................................................... 14
Average Weekly Earnings Report ........................................................................................................ 14
Employee Record Card ......................................................................................................................... 14
Glossary of Terms ......................................................................................................................... 15
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IRIS. Look forward
Introduction
In 2014 two employment tribunals, Fulton v Bear Scotland and Lock v British Gas, resulted in two
new rulings regarding the calculation of holiday pay. They stated that overtime and commission
should be included in the holiday pay calculation.
The rulings have not been written into UK legislation yet. The government have a taskforce in
place to interpret the ruling and detail how it should be implemented.
There are several things to consider:
▪ There is no clear definition of how to calculate the payments, other than an average of 52
weeks
▪ What constitutes a day or an hour’s holiday pay
▪ How holiday is calculated for monthly-paid individuals
▪ Whether the whole pay period be excluded from the calculation if a statutory payment is
included
The IRIS Holiday Pay Module provides a flexible solution, allowing you to define how the
payment should be calculated.
The IRIS Holiday Pay Module will be updated in line with any changes to the law allowing your
business to remain compliant.
There are many new terms in use describing the different aspects of Holiday Pay; these are
explained in the Glossary of Terms at the end of this guide.
Steps to setting up the IRIS Holiday Pay module
The steps you need to follow when setting up the IRIS Holiday Pay module are as follows:
Turn on the IRIS Holiday Pay Module
Configure Default
Allowances
Establish which 52
weeks to use for Average
Weekly Earnings
Define the pay elements
to be included in
Average Weekly
Earnings
Use Global Changes to update the
Default Allowances of
those affected by the ruling
Configure the Holidays of individual
employees
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IRIS. Look forward
Turn on the IRIS Holiday Pay module
After activating the IRIS Holiday Pay module with new license details, you must then ‘turn on’ the
function in each company you wish to use it in.
To do this:
1. From the Company menu select Holiday Set-up
2. Tick the Enable Enhanced Rate Holiday Pay box
This changes the screen to display the various Holiday settings you can configure.
Configure Default Allowances
Firstly, you need to configure the options on the Holiday Set-Up | Default Allowance and the
Holiday Set-Up | Holiday Calculation tabs.
It is important to note that changes made on the Holiday Set-Up screen will only affect NEW
employees that you create after making these changes. To update existing employees, you will
need to use Global Changes as described further on in the Guide.
Default Allowance tab
Holiday Pay
This is where you ‘switch on’ the module as described previously, and where you input your
default holiday rates and allowances for the company.
You need to complete the following fields:
• Can be Hours, Days, Weeks, Months or Accrual. If set to Accrual, the other Default Settings will not be available. The module is not compatible with holiday Accrual
Holiday Type
• The amount of Holiday Hours, Days, Weeks, Months each employee gets by default to cater for overtime/commission payments
Default Enhanced Holiday Entitlement
• The amount of Holiday Hours, Days, Weeks, Months each employee gets by default as part of their contract of employment
Default Contractual Holiday Entitlement
• The amount of Holiday Pay per Hour, Day, Week, Montheach employee gets by default as part of their contract of employment
Default Contractual Rate
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IRIS. Look forward
Establish the 52 weeks to use for Average Weekly
Earnings
Holiday Calculation tab
Use these options when establishing which weeks to use when calculating the Average Weekly
Earnings (AWE) for each employee.
Tick the box for each option you wish to apply, to either Weekly or Monthly paid employees, or
both:
Once you have completed these options, click on the Configure Earnings button at the bottom
of the window.
• if ticked, the system ignores any pay periods where net pay is equal to zero
Exclude zero paid periods
• if ticked, the system will ignore any pay periods advanced using the Advance button in payroll run
• where you pay holiday pay and advance the holiday period this will not create a payment record and will automatically be ignored
Exclude Advanced periods
• if ticked, the system will ignore any pay periods in which Holiday Pay was paid
Exclude periods with Holiday Pay
• if ticked, the system will ignore any pay periods in which any or a combination of SSP, SMP, SAP, SPP, ShPP or SPBP were paid
Exclude periods with Statutory Payments
• use this to specify how many of your pay weeks are contained within twelve calendar months
12 monthly pay periods equates to <number> weeks
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IRIS. Look forward
Define the pay elements to be included in Average Weekly Earnings
Configure Average Weekly Earnings
Use this screen to specify which elements of pay you would like to be included with the AWE
calculation.
Use the tree view by clicking on the plus sign to reveal more pay elements. Tick/un-tick the boxes
as required and click OK.
Payslips
If Enable Enhanced Rate Holiday Pay is ticked in Company | Holiday Setup |
Default Allowance, when printing payslips, the holiday remaining value will be the
Total Remaining value from Employee Details | Salary tab.
IRIS Holiday Module – Advanced Holiday
A pay record is created when Holiday | Advance by... is used in payroll run. This will be
flagged as a Holiday Advance period.
If you have the Holiday Pay module and have used the Holiday | Advance by...
function, the advanced periods will be recognised as ‘relevant’ when setting up the AWE
calculation.
If Exclude periods with Holiday Pay is not selected in the Holiday setup, then a
‘relevant’ period will be:
▪ a payment record where pay has been processed
▪ a payment record where zero pay has been processed if Exclude zero paid
periods is unticked in holiday setup
▪ the Holiday Advance Period
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IRIS. Look forward
Configure the Holidays of individual employees
Changes made on the Holiday Set-Up screen will only affect NEW employees that you create
after making these changes.
The default amounts will be shown in Employee Details of new employees that you create. You
can edit them here if you need to.
Employee Details
1. From the Employee menu
2. Click Select Employee
3. Select the employee concerned and click OK
4. Click on the Salary tab
Holiday Pay
Enhanced Holiday Rate is calculated for each employee during the payroll run and will appear
here afterwards. You cannot edit this here.
The other fields here should show the default amounts you set up previously. You are able to
edit them if you need to.
Working Hours
Normal Hours Worked per Week has been renamed to RTI Normal Hours.
You need to enter Contracted Hours per week or Contracted Days per week and select from
the drop-down list whether the employee works Regular Hours or Irregular Hours.
Regular Hours refers to when an employee works the same fixed hours each pay period
Irregular Hours refers to when an employee works different hours or shifts each pay period
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IRIS. Look forward
Average Hours per week and Average Weekly Earnings are calculated for each employee
during the payroll run and will appear here afterwards. You cannot edit these fields here.
The Offset Basic from Holiday Pay indicator is used specifically for employees where separate
holiday pay isn’t paid but you need to pay the extra enhanced rate.
For example, a sales employee when taking holiday is just paid a salary as normal, however as
they usually earn commission this needs to be included in the AWE to calculate the enhanced
rate holiday. Enter a contractual holiday rate and tick this box then the payroll software will
calculate what the normal holiday would have been and only pay the extra amount.
Important Note: Enhanced Holiday Rate, Average Hours per week and Average
Weekly Earnings will be populated by the payroll run into Employee Details and will
be read-only. They can be overridden in the payroll run for a particular period.
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IRIS. Look forward
Use Global Changes to update Default Allowances
Changes made on the Holiday Set-Up screen will only affect NEW employees that you create
after making these changes. To update existing employees, you will need to use Global
Changes.
First, you need to make sure you have a backup of your data which you can revert to if you run
into any difficulties. Then:
1. From the Tools menu select Global Changes
2. Use this screen to select the employees you wish to change. You can either leave the
selection at All, or click Select Now and then select individuals
Click this button to select from a list of your employees. Simply click each name to
highlight them and click OK when you are finished. Their names will appear in the
Selection Criteria section of the screen. Alternatively, you can type directly into the
Field, Condition and Detail boxes to select by Department for example, or for more
detailed selections, click on the SQL button
3. Once you are happy with your selection, click OK
4. You will now see the Global Changes screen. There are three tabs, General, Rates and
Pay/Deds. The fields you need to change are on the General tab. For each field, you
need to select an Action and enter a Value. If you click into the Action column, a drop-
down list will appear containing the actions available to you. There may also be a drop
down in the Value column, if not, just type the Value you want directly into the grid
Field Description Action Value
Holiday Period Overwrite Enter the default basis on which Holiday Pay is paid, H
for Hours, D for Days, W for Weeks, M for Months
Enhanced Rate
Entitlement
Overwrite Enter the default amount of Enhanced Holiday
Hours/Days/Weeks/Months the employee is entitled to
Holiday Allowance Overwrite Enter the default amount of Contractual Holiday
Hours/Days/Weeks/Months the employee is entitled to
Holiday Rate Overwrite Enter the default rate at which Contractual Holiday is
paid
5. When you are finished, click OK and then click Yes to make the changes
6. Click OK
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IRIS. Look forward
Other fields you may wish to change using Global Changes:
▪ Contracted Hours per week
▪ Contracted Days per week
▪ Average Hours per week
▪ Contract Type
▪ Offset Basic from Holiday Pay
Unless all employees have the same entries for these fields, you will need to do a selection as
described in step 2 of this section.
Use Import to update Default Allowances
If you have an Excel spreadsheet, fixed length or csv file, it is possible to update the Holiday
details using the File | Import Data function. Again, make sure you have a backup of your data
first.
The fields you can import are:
▪ Holiday Contractual Taken
▪ Holiday Enhanced Entitlement
▪ Holiday Enhanced Taken
▪ Holiday Enhanced Remaining
▪ Contracted Hours per week
▪ Contracted Days per week
▪ Contract Type
▪ Offset Basic from Holiday Pay
▪ Holiday Diary Value
▪ Holiday Period
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IRIS. Look forward
Pay Holidays during Payroll Run
When you come to paying an employee who is entitled to enhanced holiday pay:
1. During the payroll run click on their Holiday button on the right of the screen:
2. You will then see this screen:
The system does the Holiday Calculation for you, you just need to enter the holiday amounts
taken in the This Payroll section. The system calculates values for Average Hours per week,
Average Weekly Earnings and Enhanced Holiday Rate; if you want to alter these in payroll run
you can, you will need to click the Recalculate button after making changes. Changes will show
on the History button beside those fields in Employee Details.
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IRIS. Look forward
3. Click the Holiday Detail button to view a more comprehensive explanation of the
calculation:
4. Click the Show Pay tab to view which weeks were used to calculate the AWE:
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IRIS. Look forward
Entering Holidays via the Absence Diary
When you enter holiday via the calendar, you now have the option to add holidays at the
Enhanced or contractual rate.
Reports
Several reports have been added/amended to assist with Enhanced Holiday reporting.
Period Holiday Summary
▪ The report shows Holiday Taken in a specified period, split between Contractual and
Enhanced rates
▪ The changes to the report will only happen if the IRIS Holiday Module is enabled in
Holiday Setup | Default Allowance
▪ To install the report, from the Reports menu select Library Selection then Summaries.
Double click on Period Holiday Summary then click OK and Close. To print it, from the
Reports menu select Print Summaries and double click on Period Holiday Summary
▪ Holiday Taken will show the number of enhanced holidays taken and the amount of
contractual holidays taken in the pay period
Employee Absence Listing
▪ The report shows Absence recorded in an employee’s Absence Diary
▪ To install the report, from the Reports menu select Library Selection then Absence
Reports. Double click on Employee Absence Listing then click OK and Close. To print it,
from the Reports menu select Print Other Reports and double click on Employee
Absence Listing
▪ Changes to the report will only happen if the IRIS Holiday Module is enabled in Holiday
Setup | Default Allowance
▪ In the Notes column the holiday taken includes the total of both Enhanced and
Contractual holiday. For example, an absence record for an employee has 10 hours
Enhanced and 2 hours Contractual so the Notes column will display as No. of Hours:
12.00
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IRIS. Look forward
Employee Holiday Entitlement Report
▪ The report shows Length of Service, Enhanced Holiday Entitlement, Enhanced Holiday
Taken, Contractual Holiday Entitlement, Contractual Holiday Taken, Total Holiday
Entitlement, Total Entitlement Remaining
▪ To install the report, from the Reports menu select Library Selection then
Miscellaneous. Double click on Employee Holiday Entitlement then click OK and Close.
To print it, from the Reports menu select Print Other Reports and double click on
Employee Holiday Entitlement
Average Weekly Earnings Report
▪ The report shows the Average Weekly Earnings for employees up to the selected pay
period and the periods used to calculate it
▪ Total Earnings and Total Hours include any pay elements ticked on the Configure
Average Weekly Earnings screen
▪ Also shows Contracted Hours per week, Contracted Days per week, Average Weekly
Hours and Enhanced Holiday Rate
▪ To install the report, from the Reports menu select Library Selection then Summaries.
Double click on Average Weekly Earnings then click OK and Close. To print it, from the
Reports menu select Print Summaries and double click on Average Weekly Earnings
Employee Record Card
▪ The report has been updated to include the new Enhanced Holiday information
▪ Changes to the report will only happen if the IRIS Holiday Module is enabled in Holiday
Setup | Default Allowance
▪ To install the report, from the Reports menu select Library Selection then
Miscellaneous. Double click on Employee Record Card then click OK and Close. To print
it, from the Reports menu select Print Other Reports and double click on Employee
Record Card
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IRIS. Look forward
Glossary of Terms
Enhanced Holiday Rate – the holiday rate calculated using the IRIS Holiday Pay module
Contractual Rate – a standard rate of holiday pay not using the enhanced rate calculation
Regulation 13 Leave – the statutory entitlement of 4 weeks’ leave
Additional Leave – the extra 1.6 weeks leave UK employees are given for bank holidays
Contractual Leave – anything above the statutory leave
Guaranteed Overtime – overtime the employer is obliged to offer and pay, and the employee is
obliged to work
Non-guaranteed Overtime – overtime the employer is not obliged to offer and pay, but the
employee is obliged to work if it is offered
Voluntary Overtime – overtime the employer is not obliged to offer or pay and, if offered, the
employee is free to decline
Regular Hours – used when an employee works the same fixed hours each pay period
Irregular Hours – used when an employee works different hours or shifts each pay period
Offset Basic from Holiday Pay – This indicator is used specifically for employees where
separate holiday pay isn’t paid but you need to pay the extra enhanced rate. For example, a sales
employee when taking holiday is just paid a salary as normal, however as they usually earn
commission this needs to be included in the AWE to calculate the enhanced rate holiday. If you
tick this box, the payroll software will calculate what the normal holiday would have been and
only pay the extra amount.
AWE – Average Weekly Earnings
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IRIS. Look forward
Useful numbers
HMRC online service helpdesk HMRC employer helpline
Tel: 0300 200 3600
Fax: 0844 366 7828
Email: [email protected]
Tel: 0300 200 3200
Tel: 0300 200 3211 (new business)
Contact Sales (including stationery sales)
For IRIS Payrolls For Earnie Payrolls For IRIS Payroll Professional
Tel: 0344 815 5656
Email: [email protected]
Tel: 0344 815 5676
Email: [email protected]
Tel: 0345 057 3708
Email: [email protected]
Contact Support
Your Product Phone E-mail
IRIS PAYE-Master 0344 815 5661 [email protected]
IRIS Payroll Business 0344 815 5661 [email protected]
IRIS Bureau Payroll 0344 815 5661 [email protected]
IRIS GP Payroll 0344 815 5681 [email protected]
IRIS GP Accounts 0344 815 5681 [email protected]
Earnie or Earnie IQ 0344 815 5671 [email protected]
IRIS Payroll Professional (formerly Star) 01273 715300 [email protected]
IRIS is a trademark.
© IRIS Software Group Ltd 11/2019.
All rights reserved.
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